Party Formation and Policy Outcomes under Different Electoral Systems

I introduce a model of representative democracy that allows for strategic parties, strategic candidates, strategic voters, and multiple districts. If the distribution of policy preferences is sufficiently similar across districts and sufficiently close to uniform within districts, then the number of effective parties is larger under Proportional Representation than under Plurality Voting (extending the Duvergerian predictions), and both electoral systems determine the median voter's preferred policy outcome. However, for more asymmetric distributions of preferences the comparative results are very different; the Duvergerian predictions can be reversed; compared with the median voter's preferred policy, the outcome with Proportional Representation can be biased only towards the center, whereas under Plurality Voting the policy outcome can be anywhere. The sincere vs. strategic voting issue is welfare irrelevant, but sincere voting induces more party formation.